Accelerating Quota Share Cession Audits: AI-Driven Extraction of Cession Statements for Treaty Accountants

Quota share treaties should make accounting straightforward: apply the agreed share to written and earned premium, allocate losses accordingly, and settle via the statement of account. In reality, Treaty Accountants face sprawling Cession Statements, multi-tab Treaty Bordereaux, and inconsistent Ceded Premium Calculation Worksheets that arrive in different formats, currencies, and levels of detail. Validating ceded premium, ceding commissions, profit commission, loss participation, and corridor or aggregate terms across every period can turn a routine cession audit into a multi-week grind.

Nomad Data’s Doc Chat changes the equation. Built specifically to process entire claim files, policy packs, and reinsurance documents at scale, Doc Chat gives reinsurance teams an AI-powered way to extract, consolidate, and cross-verify cession data across all sources—instantly. For Treaty Accountants tasked with quota share compliance and settlement accuracy, this means moving from manual tie-outs and sampling to automated, page-cited, end-to-end checks of every figure that impacts ceded premium, earned premium, ceding commission, and loss recoverables.

The nuance Treaty Accountants confront in quota share cession audits

Quota share sounds simple—until the data arrives. Treaty Accountants in reinsurance operations must reconcile monthly or quarterly outwards reinsurance postings with treaty mechanics and actual exposure movement. The reality includes:

• Data heterogeneity: Cession Statements, Treaty Bordereaux, Ceded Premium Calculation Worksheets, Statements of Account (SOA), loss bordereaux, cash calls, remittance advices, endorsement schedules, and cover notes arrive as PDFs, spreadsheets, and email attachments—often incomplete or misaligned.
• Complex treaty mechanics: Sliding-scale commission, fixed ceding commission with override, profit commission, loss corridors, aggregate limits, annual min/max premiums, reinstatement premiums, brokerage, taxes/levies, and loss participation clauses each change the math in different ways.
• Timing and basis mismatches: Written vs. earned premium, risk-attaching vs. losses-occurring vs. claims-made; late endorsements; back-dated corrections; and prior-period true-ups complicate period-to-period audits.
• Currency and FX volatility: Multi-currency treaties require proper FX translation at specified rates and dates, and careful tracking of FX gains/losses in ceded balances.
• Downstream impacts: Incorrect cessions distort Schedule F (for U.S. GAAP), IFRS 17 reinsurance held measurement, credit for reinsurance, collateral adequacy, and reinsurance receivable aging.

On top of this, clients and retrocessionaires can request supporting details at any time. Treaty Accountants must prove how a ceded amount was derived, and demonstrate that terms—exclusions, sublimits, aggregate caps, or corridor deductibles—were applied correctly across every policy, class, territory, and accident/underwriting period affected.

How quota share cession auditing is handled manually today

Most teams still rely on a painstaking mix of spreadsheet workbooks, email threads, and sampling. A typical manual workflow for a Treaty Accountant looks like this:

1. Collect monthly or quarterly Cession Statements, the Treaty Bordereaux (premium and loss), Ceded Premium Calculation Worksheets, SOA, and remittance advice from brokers or cedents.
2. Open each spreadsheet and PDF to find ceded written premium, earned premium, ceding commission rate(s), brokerage, taxes/levies, sliding scale details, and loss splits by underwriting year, class, and treaty layer.
3. Copy/paste or VLOOKUP/XLOOKUP to align treaty codes, risk IDs, policy numbers, effective dates, and class-of-business with internal ledgers and sub-ledgers. If basis differs (risk-attaching vs. occurrence), build adjustment tabs.
4. Sample policies and losses to reconcile to the Treaty Bordereaux. For losses: tie claim IDs and dates of loss to the loss bordereau, examine occurrence aggregation and catastrophe coding, and confirm recoverables align to the quota share and any corridor/aggregate caps.
5. Recreate the ceded premium math: base premium x quota share, plus/minus sliding-scale or profit commission adjustments, offsets, and prior-period true-ups.
6. Address gaps: missing endorsements, late endorsements, rate changes, reinstatement premiums, or clashes with policy exclusions or sublimits.
7. Prepare an exceptions list; email brokers/cedents for clarifications; hold meetings; re-run calculations; finalize a settlement position; post to GL; reconcile to SOA and remittance.

Even for experienced Treaty Accountants, this process can take days per treaty per period—especially when documents run to hundreds of pages or the bordereaux contain tens of thousands of rows. Human fatigue leads to missed exclusions, caps, or commission step changes. Sampling helps but can miss material errors in non-sampled populations. And every correction cascades through ceding commission, profit commission, and loss participation calculations.

AI for reviewing quota share cession statements: how Doc Chat automates the work

Doc Chat by Nomad Data is a suite of purpose-built, AI-powered agents that automate end-to-end document review and verification. It ingests entire treaty packs—thousands of pages and multi-tab spreadsheets—then extracts and cross-checks every data point driving your cession, with page-level citations. Treaty Accountants can ask plain-language questions and receive answers in seconds, across all files at once.

Here is how Doc Chat transforms the cession audit:

1) Ingest and normalize every document at once

Drag-and-drop your Cession Statements, Treaty Bordereaux (premium and loss), Ceded Premium Calculation Worksheets, SOAs, cover notes, treaty wording, endorsements, loss runs, and cash calls. Doc Chat automatically classifies, indexes, and structures them—even when formats vary widely month to month or cedent to cedent. As we detail in Beyond Extraction: Why Document Scraping Isn’t Just Web Scraping for PDFs, the magic is not just reading fields—it’s inferring the rules your Treaty Accountants apply when pages disagree or when data is spread across tabs and appendices.

2) Extract ceded premium data AI—built on your playbook

Doc Chat learns your treaty accounting playbook: quota share percentages, timing basis (written vs. earned), how to apply sliding scale and profit commission, FX translation rules, brokerage and tax handling, and how to treat corridors or aggregate limits. Using these rules, the agent automatically calculates what ceded written and earned premium should be and compares it to what appears on the Cession Statement or SOA. This is true “extract ceded premium data AI”—not generic OCR—so it understands that ceding commission can step up or down per loss ratio band and that step changes can be triggered by updated loss development.

3) Cross-verify cession with treaty bordereaux

With a single prompt, Doc Chat will cross-verify cession with treaty bordereaux across premium and loss tabs—aligning policy numbers, class codes, territories, effective dates, and loss IDs. It flags:

• Premium lines included in the Cession Statement but missing in the premium bordereau (and vice versa).
• Loss recoverables posted without corresponding loss bordereau detail.
• Earned premium timing mismatches vs. exposure curves and underwriting basis.
• Corridor and aggregate caps exceeded at the treaty or underwriting-year level.
• Reinstatement premium triggers tied to aggregate or per-occurrence exhaustion.

For each exception, Doc Chat cites the page or tab, the cell/row reference, and the clause in treaty wording or endorsement that governs the adjustment. You get a defensible audit trail in minutes.

4) Validate commissions and participation clauses

Whether your treaty uses fixed ceding commission, a sliding scale tied to loss ratio, profit commission with carry-forward, or a loss participation clause, Doc Chat applies the correct math based on the period-to-date and inception-to-date metrics. It confirms commissions are computed on the proper base (e.g., written premium net of brokerage and certain taxes) and reconciles every step to the declared commission in the SOA.

5) Handle currency, FX, and remittance tie-outs

Doc Chat normalizes multi-currency items and applies FX per your contract—e.g., month-end closing rate for reporting, transaction-date rate for recognition. It then reconciles ceded receivables and payables to SOA totals, remittance advice, and GL postings, flagging unallocated cash, FX remeasurement differences, and timing delays.

6) Give Treaty Accountants real-time Q&A

Ask Doc Chat questions like:

• “Show all policies and premium lines contributing to Q2 earned premium for the Marine class under treaty QS-2023, with page citations.”
• “List all losses contributing to the 60% quota share recovery for underwriting year 2022, including corridor application and any aggregate cap impact.”
• “What ceding commission band applied in March, and how did the loss ratio calculation change after the latest loss development?”
• “Identify premium rows in the premium bordereau that do not appear in the Cession Statement, by policy and amount.”
• “Tie the SOA settlement amount to underlying premium and loss movements and list reconciliation items.”

The answers come back in seconds with pinpoint citations—so oversight, auditors, and retro partners can verify instantly. This “ask-and-verify” model mirrors the transformation described in our client story on complex documents: Great American Insurance Group Accelerates Complex Claims with AI.

Automating the cession audit end-to-end with purpose-built agents

Beyond point extraction, Doc Chat assembles a full audit package for the Treaty Accountant:

Exception management

Doc Chat creates an exceptions register with severity, financial impact, and recommended actions (e.g., request missing endorsement; apply sliding-scale band B; adjust loss recoverable for corridor; retranslate premium at contract rate). Every exception is linked to the governing clause and the source page.

Standardized outputs

Doc Chat produces standardized audit outputs tailored to your templates: premium and loss tie-out sheets, commission recomputation schedules, FX reconciliation tabs, proof-of-calc PDFs, and a management summary. As highlighted in AI’s Untapped Goldmine: Automating Data Entry, structured, repeatable output is a core source of ROI because it collapses the cycle time between analysis and settlement.

Policy- and claim-level drill-down

Whether you are a cedent preparing a response to a reinsurer’s audit or a reinsurer validating a cedent’s quarterly submissions, Doc Chat allows you to drill to the exact policy or claim line and see the data lineage—how that one line flows into earned premium, into ceding commission, into profit commission, and into the SOA settlement.

Controls and compliance alignment

Doc Chat preserves an audit trail that aligns to internal controls (SOX/ICFR), Schedule F tie-outs, IFRS 17 disclosures for reinsurance held, and credit-for-reinsurance requirements. Every answer is source-cited to a page, tab, or clause. Access controls, logging, and data retention settings support compliance reviews and regulator questions.

Business impact for reinsurance teams: faster, cheaper, more accurate

The impact for Treaty Accountants and reinsurance operations is immediate and measurable:

• Time savings: Reviews that took days or weeks compress into minutes. Doc Chat ingests thousands of pages at once and answers cross-document questions instantly.
• Cost reduction: Fewer manual touchpoints; less dependency on external consultants for complex recomputations; reduced overtime spend during quarter-end close.
• Accuracy and completeness: Doc Chat reads every line of every document with the same rigor, eliminating sampling bias. It surfaces hidden references to exclusions, sublimits, corridors, and aggregate caps that commonly drive leakage and disputes.
• Scalability: Handle surge volumes (e.g., catastrophe quarters with high loss complexity) without adding headcount.
• Faster settlement with fewer disputes: Page-cited answers reduce back-and-forth with brokers, cedents, and reinsurers. Everyone sees the same evidence at the same time.
• Happier teams: Treaty Accountants spend more time on exception resolution, deal insight, and cash management—and less time on mechanical tie-outs and copying between spreadsheets.

Clients consistently report that Doc Chat shortens close cycles, reduces leakage stemming from missed clauses or misapplied commission bands, and creates a defensible record for audits, reinsurer queries, and management reporting.

Why Nomad Data’s Doc Chat is the best solution for cession audits

Nomad Data’s differentiation is purpose-built for insurance and reinsurance documentation:

• Volume, velocity, and variety: Doc Chat ingests entire treaty packs—policies, Treaty Bordereaux, Cession Statements, loss runs, SOAs, cash calls—processing thousands of pages per minute.
• Complexity-handling: Exclusions, endorsements, caps, and trigger language hide inside dense treaty wording. Doc Chat finds them and applies your playbook to produce consistent, defensible outcomes.
• The Nomad Process: We train Doc Chat on your playbooks, treaty mechanics, and reporting templates—delivering a personalized solution that mirrors your team’s workflow.
• Real-time Q&A: Ask, “Recompute ceded earned premium for Q3 under QS-2023 and show differences to the SOA with page citations,” and get verifiable answers instantly.
• White-glove service and speed: We implement in 1–2 weeks, standing up pilots that use your real treaty packs to prove value fast.
• Security and governance: SOC 2 Type II; document-level traceability; role-based access; and a transparent audit trail that satisfies compliance, audit, and regulator stakeholders.

Unlike generic OCR or consumer-grade AI, Doc Chat is an enterprise-grade system built for the realities of complex insurance documentation and the stakes of reinsurance accounting.

Where Doc Chat fits in the Treaty Accountant’s day-to-day

Doc Chat complements, not replaces, your existing reinsurance administration and ERP stack (e.g., reinsurance modules in policy admin, general ledger, data warehouse, or specialized reinsurance systems). Typical touchpoints include:

Before close

Run Doc Chat against draft Cession Statements, Treaty Bordereaux, and Ceded Premium Calculation Worksheets to pre-clear exceptions. Identify missing endorsements, mismapped class codes, FX misapplications, and commission band triggers before the SOA is finalized.

During close

Use Doc Chat’s live Q&A to resolve last-mile questions from finance, reinsurance operations, cash application, and actuarial. When a loss development update changes the loss ratio, Doc Chat recalculates sliding-scale bands and profit commission instantly and shows what changed—and why.

After close

Package a page-cited audit bundle for internal audit, reinsurers, and brokers. Push structured exception registries into your workflow tool or ticketing system and track through resolution.

Concrete checks Doc Chat performs out of the box

Treaty Accountants can rely on Doc Chat to automate high-impact, error-prone checks, including:

• Premium written vs. earned tie-out by underwriting year, class, treaty, and currency
• Quota share percentage application per treaty wording/endorsement
• Sliding-scale commission band selection and calculation
• Profit commission eligibility and carry-forward/carry-back logic
• Loss participation/corridor and aggregate cap application
• Occurrence vs. underwriting-year assignment for both premium and loss
• Reinstatement premium triggers and rate application
• Brokerage, taxes/levies base calculation and netting
• FX rate application at the period and transaction level; remeasurement tie-out
• SOA to GL reconciliation, including remittance advice mapping and unallocated cash flags

Because Doc Chat is trained on your process, the outputs use your naming conventions, treaty codes, and templates, eliminating the translation layer between the AI and your books.

How we implement in 1–2 weeks: a practical path to value

The fastest way to build trust in AI is to use your own treaty packs. Our white-glove onboarding follows a simple arc:

1. Discovery and sampling: You share a representative sample set: Cession Statements, Treaty Bordereaux, Ceded Premium Calculation Worksheets, treaty wording, endorsements, SOAs, remittance advices, and any internal tie-out templates.
2. Playbook capture: We interview your Treaty Accountants to capture unwritten rules—how they pick commission bands, handle late endorsements, apply corridors, or treat certain taxes. As discussed in our article Beyond Extraction, this is where most projects fail; Nomad specializes in codifying those human rules.
3. Preset configuration: We configure Doc Chat “presets” that output your standard audit packs—premium/loss tie-outs, commission schedules, FX reconciliations, and exception registers.
4. Pilot and calibration: We run your live packets through Doc Chat, review results with your team, calibrate any edge cases, and lock in outputs.
5. Go-live and scale: Drag-and-drop usage begins day one; API and SFTP integrations follow as needed to push structured outputs into your reinsurance admin and data warehouse.

By week two, most teams have Doc Chat producing repeatable audit packs that shave days off close while improving accuracy and defensibility.

Real questions Treaty Accountants ask Doc Chat

Doc Chat enables question-driven audits instead of document-driven hunts. Common prompts include:

• “Automate cession auditing reinsurance for QS-2024: extract all ceded premium and ceding commission amounts, compare to SOA, and list variances over $50,000 with citations.”
• “AI for reviewing quota share cession statements: identify losses where corridor applied and recompute recoverables net of corridor and aggregates.”
• “Extract ceded premium data AI: build an earned premium reconciliation for underwriting year 2023, by class and currency.”
• “Cross-verify cession with treaty bordereaux: show policy rows included in premium bordereau but not in the Cession Statement.”
• “Recompute sliding-scale commission based on the updated loss ratio as of June and show the prior and new band with math steps.”

Each answer includes citations to the exact page, tab, or clause that justifies the result. That citation trail is what accelerates approvals internally and with counterparties.

From manual to machine: why this works now

For years, teams tried to automate cession audits with basic OCR or hard-coded parsers that broke whenever formats changed. Modern, insurance-trained AI is different. It doesn’t just read fields—it learns your playbook and reasons across inconsistent documents. It can enforce your accounting policy consistently across the entire population, every period. The result: repeatable, defensible outputs in a fraction of the time.

This shift mirrors broader changes across insurance operations, where large language models enable sophisticated reasoning over unstructured documentation. If you want to understand why these projects succeed where others failed, read AI’s Untapped Goldmine: Automating Data Entry. The thesis is simple: most complex work ultimately collapses into structured data entry governed by nuanced rules. Doc Chat captures those rules and executes them perfectly, at scale.

Security, privacy, and auditability

Reinsurance documentation is sensitive, and Treaty Accountants operate in a highly controlled environment. Doc Chat is built for enterprise security and governance:

• SOC 2 Type II controls and secure hosting
• Role-based access control, encryption at rest and in transit
• Document- and page-level citations for every answer
• Detailed audit logs for user actions and access
• No model training on your data unless you explicitly opt in

Compliance, audit, and regulator stakeholders can trace every number back to its source page, tab, and governing clause.

The bottom line for Treaty Accountants

Quota share cession audits should not be the bottleneck that delays close, inflates loss-adjustment expense, or drives disputes. With Doc Chat, Treaty Accountants can automate the heavy lift—reading, extracting, verifying, and cross-referencing—and focus attention on the exceptions that truly need judgment. The payoff is faster settlement, fewer disputes, stronger control evidence, and happier teams.

If you are ready to see how Doc Chat for Insurance can compress your next cession audit from days to minutes—while increasing accuracy and defensibility—let’s talk.